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Justices grapple with proposed e-banking rule

A proposed overhaul of the state’s e-banking rules for lawyers could have a significant effect on solo practitioners and attorneys working at small law firms. But exactly what that effect will be depends on who is being asked.

The Wisconsin Supreme Court held a public hearing Friday on the proposal, which was filed by the Office of Lawyer Regulation in December 2014 . The nearly 40-page proposal would, in general, expand the state’s current trust-account rule so that lawyers could accept more forms of electronic payment.

Among other things, the proposed changes call for removing record-keeping requirements from the rule itself, transferring those requirements to the OLR’s guidelines, and establishing a number of presumptions that would help the OLR investigate the alleged misdeeds of lawyers who use electronic banking.

The court on Friday heard a presentation from Keith Sellen, director of the OLR, as well as testimony from Dean Dietrich, a lawyer, and Timothy Pierce, the State Bar’s ethics counsel.

The complexity of the proposed rule was not lost on the justices, who spent much of the public hearing trying to understand the format of the petition.

“This isn’t the usual format for a petition. Nothing about this tells me  how this fits into the (Supreme Court Rules) numbering system,” Justice Shirley Abrahamson said.

Her confusion arose in part from her not at first realizing that even though the petition itself was only two pages long, there were also nearly 40 pages of appendices that explained the specific changes and outlined the proposed reorganization.

Chief Justice Pat Roggensack similarly said the document’s complexity made it impossible for court staff to track the proposed changes.

Abrahamson, as well as justices Ann Walsh Bradley and David Prosser, asked how, given that complexity, the new rule would affect solo practitioners and lawyers at small firms.

Prosser asked whether an attorney working at Foley & Lardner LLP, for instance, would have to worry about the changes. Sellen said “no” because large firms have staff members who deal with trust accounts.

But, “that’s true now,” Sellen said, “and that was true 20 years ago.”

Dietrich, who participated on the committee that the OLR formed to develop the new rule, said there will be many opportunities for attorneys to learn about whatever changes are adopted. Webinars for both solo practioners and lawyers at small firms, he said, would be offered in Spring 2016.

Dietrich said he generally supports the proposal. At the same time, speaking as someone who also represents attorneys in disciplinary cases, he expressed concerns about one of the rebuttable presumptions that the OLR is calling for.

The presumptions are essentially the result of a compromise, both Sellen and Dietrich explained at the hearing. Expanding the rule to allow lawyers to accept more electronic methods of payment, Sellen said, could hinder the OLR’s ability to prosecute certain cases, especially if it means there wouldn’t be a paper trail to follow in an investigation.

In the main, the two rebuttable presumptions would make it lawyers’ responsibility to produce records.

First, lawyers would be presumed to have broken the rule that requires them to hold client and third-party money in trust if they failed to properly deliver any amount owed to the owner or if they were unable to produce records showing what happened to the money.

Second, attorneys would be presumed to have converted funds and broken the dishonesty rule if they were unable to provide records showing that the money was still in the trust account.

Dietrich, noting that he understands the need for the second presumption and could not think of an alternative to it, said it is troublesome because some attorneys could be charged with dishonesty for something that may not be their fault. He cited himself as an example. Dietrich said he reported himself to OLR recently because an account under his guardianship became overdrawn when the government failed to transmit some payments to the account.

He also noted that some of the court’s recent decisions in attorney discipline cases would have been decided differently under the second presumption.

However, Pierce, who fields thousands of calls a year from attorneys about ethics, said he has been letting attorneys know about the proposal and the feedback is generally positive. The rule, he said, does not compel attorneys to use e-banking, but gives others, especially younger attorneys in small or solo practices, the ability to manage their business’ finances the same way they manage their personal finances.


About Erika Strebel, erika.strebel@wislawjournal.com

Erika Strebel is the law beat reporter for the Wisconsin Law Journal and a law school student at UW-Madison. She can be reached at 414-225-1825.

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